Good Faith Estimate, Loan Estimate, or Cost Estimate?

House prettyPeople are confused about how to get an estimate for their mortgage. If you are getting pre-approved to buy a home or want to refinance, here is what you need to know about getting an upfront estimate.

GOOD FAITH ESTIMATE

This form was officially retired October 3, 2015. The Consumer Finance Protection Bureau (CFPB), the committee set up by the White House to oversee lending law, replaced it with the Loan Estimate. However, you cannot get an LE upfront, so please read below. To be perfectly clear, the GFE is dead and gone. No more GFEs allowed.

LOAN ESTIMATE

This simplified form is what you get only after making a full application. That means you provide the lender with these six items: (1) name, (2)  social security number for pulling credit report, (3) property address, (4) sales price or estimated value of property, (5) loan amount, and (6) income.

As you can see, #2 will stop you if you aren’t ready to commit to a lender and have your credit report pulled. In addition, #3 will stop you if you’re still shopping for a home and don’t have an address. This is why you don’t ask for a loan estimate upfront. It comes later in the process.

COST ESTIMATE WORKSHEET OR FEES WORKSHEET

This is the new “upfront Good Faith Estimate.” This form will show you everything you need to see about your loan: interest rate, monthly payment, lender fees, and other closing costs. If you read Mortgage Rip-Offs and Money Savers or Homebuyers Beware, use the same shopping method in those books, except ask for a Cost Estimate rather than a GFE. It doesn’t matter what title is at the top of the page, so don’t worry if a lender has a variation.

If you have any questions about this, post a comment or send me an email.

I am licensed to do mortgage loans in California and Washington states. Please let me know if I can be of help to you.

NMLS #1284134
Envoy Mortgage, a full service mortgage lender

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